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The gold standard is a system under which a country ties the value of its currency to gold, setting a fixed price at which gold can be bought or sold by the government. The U.S. had since its early history used both gold and silver to value its currency, a system known as bimetallism. The government set the value of gold at 15:1 to silver.

Under bimetallism, fluctuations in the value of gold and silver would cause one metal to be virtually removed from circulation for a time. A rise in the value of gold in the early 19th century made gold more valuable as a metal than as currency, causing most Americans to have their gold coins melted down. As a result, the U.S. was virtually taken off the gold standard until 1834, when the government changed the gold/silver ration to about 16:1.

The use of silver currency declined following the California Gold Rush of the 1850s, which reduced the value of gold in relation to silver. The U.S. effectively ended its use of the silver standard in 1873 with the passage of the Fourth Coinage Act, under which the government would no longer produce silver dollars for domestic use or exchange silver at a fixed price.

The Coinage Act (along with European countries dropping the silver standard) contributed to the Panic of 1873, an economic depression in the U.S. and Europe. The act reduced the money supply, causing a rise in interest rates and making it difficult for banks to raise capital or pay off debts. The act also hurt silver mining companies in the West, who called the act the “Crime of ’73.”

In the 1880s and ‘90s, crop prices decreased, creating great hardship for farmers. Pro-silver advocates and Western populists argued for an increase in the money supply through the reintroduction of silver currency. The issue was at the center of the 1896 presidential election. The Democrats, who later split over the issue, nominated populist William Jennings Bryan after his famous “cross of gold” speech at the convention. Bryan decried the gold standard, proclaiming “you shall not crucify mankind upon a cross of gold.”

The gold standard was favored by Eastern bankers who wanted to protect against inflation. Running on a pro-gold standard platform, William McKinley defeated Bryan in an election sharply divided along sectional lines, clearing the way for the passage of the Gold Standard Act just over three years later.

The United States remained on the gold standard until 1933, when President Franklin Roosevelt suspended it in order to combat the deflation of the Great Depression. The U.S. continued to exchange gold internationally at a fixed price until 1971, when President Richard Nixon ended the practice.